CPRGS IN THE FIVE-YEAR SOCIO- ECONOMIC DEVELOPMENT PLAN §inh Thi Chinh Ministry of Planning & Investment Hanoi, april 2006

Content 1.CPRGS objectives in growth and poverty reduction in Vietnam. 2.Vietnam’s achievements in social development and poverty reduction. 3.Changes in the planning process toward poverty reduction and increased participation. 4.Changes in content and methods of making five-year SEDP with a strong focus on poverty reduction. 5.Integrating budget allocation into poverty reduction. 6.Lessons learned and challenges.

1. CPRGS objectives in growth and poverty reduction in Vietnam  Align high & sustainable economic growth with social progress and equity.  Create an enabling environment.  Restructure the economy.  Promote human development.  Expand social safety net.  Embrace public administration reform  Develop a Monitoring and Evaluation (M&E) system.

2. Vietnam’s achievements in social development and poverty reduction  Poor households (by national standards ) decreased from 17.5% in 2001 to 8.3% in 2004 and 7% in  Vietnam fulfilled MDGs 10 years ahead of schedule in terms of poverty reduction, from 58.1% in 1993 to 19.5% in  The rich and poor gap is slowed down.  Significant progress is made in the social sector, including eduction, science, health, population and family planning.

Percentage in 2000 Percentage in 2004 Percentage in North Northwest Red River Delta North of Central Part Coastal South Central Highlands Southeast Mekong River Delta Total Poor households (by national standards )

TargetsUnit (1) Annual job creation Mil. peopl e (2) Poor households (old standards)%8.317 (3) Birthrate decrease% (4) Rural population with access to clean water supplies %5862 (5) Malnourished children under 5% (6) Provinces with lower secondary universalisation Province2531 (7) Communes with health centers%99100 (8) Communes with doctors% (9) Hospital beds per 10,000 people% Record of social targets

3. Changes in the planning process toward poverty reduction and increased participation Three pillars - economic, social, environmental - of the five year SEDP a.Planning capacity building.  Provide with local government training on: Raising the public awareness through workshops.Raising the public awareness through workshops. Introducing principles, rules and developments.Introducing principles, rules and developments. Adopting new approaches in making planning.Adopting new approaches in making planning. Methods of calculating targetsMethods of calculating targets

3. Changes in the planning process toward poverty reduction and increased participation b.Input and information for the planning process.  Organising international workshops.  Using findings on the living standards surveys and poverty assessments.  Conducting thematic studies of importance.

3. Changes in the planning process toward poverty reduction and increased participation c.Consultation process. Send workshop documents. Send workshop documents. Organise regional workshops. Organise regional workshops. Hold consultation. Hold consultation. Ministries and sectors organise workshops on their respective and national plans. Ministries and sectors organise workshops on their respective and national plans. d.Develop result-based M&E system.

3. Changes in the planning process toward poverty reduction and increased participation  Some provinces organise theme-based training workshops as a way of making the five-year plan, focusing on:  Raising awareness of civil servants and people about the CPRGS.  Introducing principles, process, and methods of making annual and five-year socio-economic development plans.  Adopting a new approach in planning: strategic, result-based, and participatory planning, and linking plan-making to resource allocation…

4. Changes in content and methods of making five-year SEDP with a strong focus on poverty reduction Requirements of the five-year plan:  The SEDP meets the need of broad-based reforms and links socio- economic activities to global ecnomic integration.  The SEDP places special emphasis on quality of development.

4. Changes in content and methods of making five-year SEDP with a strong focus on poverty reduction  The five-year plan specifies objectives set in the sectoral development strategies, CPRGS, VDGs and Vietnam’s international commitments.  The five-year plan incorporates poverty reduction, sustainable development, women and youth issues, ethinic minorities, and M&E as well.

4. Changes in content and methods of making five-year SEDP with a strong focus on poverty reduction  The plan aims to release the forces of production, esp. non-state sector.  State-managed resources are used to better respond to non-profit, social infrastructure development.  Budgets are managed and allocated in an open and transparent manner.  International standards and best practices are adopted in making plans.

4. Changes in content and methods of making five-year SEDP with a strong focus on poverty reduction  Local governments are empowered in the planning process.  The making of five-year plans is based on socio-economic analysis and assessment, socio-economic development targets, higher education attainment, better healthcare, poverty reduction, and policy matrix designed to achieve the prescribed objectives.

Several social targets of the five-year plan A strong focus on social sector and poverty reduction:  Poverty rate by new standards at 10-11% by  8 millions new jobs created.  Urban unemployment under 5%.  Mortility rate among children under one: 16/1,000; children under five: 25/1,000.

Several social targets of the five-year plan  Maternal mortility down to 60/100,000…  Social safety net developed.  Better child and mother healthcare.  Life improvement for ethnic minorities.  Gender equality, women empowerment, and child’s rights protection…

5. Integrating budget allocation into poverty reduction  Three channels of resources for poverty reduction:  Investment in projects and programs contributing to poverty reduction.  Investment in national targeted programs to reducte poverty.  Investment in economically-developed regions, sectors and areas of comparative advantage to generate “break-through” impacts and support poor regions

5. Integrating budget allocation into poverty reduction  Budget allocation is priority-based, with special emphasis on poor regions and communes.  Additional fund is allocated to agriculture and rural development.  Pro-poor and housing-support programs are developed, esp. for the ethnic minority people…  Additional fund is geared towards development objectives in the areas of education, health, culture and social issues, esp. for the poor regions and communes.

Provinces with varied poor households : 12 provinces with highest rate of poor households : 12 provinces with second highest rate of poor households : 13 provinces with medium rate of poor households : 12 provices with low rate of poor households : 12 provinces with lowest rate of poor households Total100.0 Development investment by province (%)

Provinces with varied poor households : 12 provinces with highest rate of poor households : 12 provinces with second highest rate of poor households : 13 provinces with medium rate of poor households : 12 provices with low rate of poor households : 12 provinces with lowest rate of poor households Total100.0 Targeted support investment for poor provinces (%)

6. Lessons learned and challenges  Growth and poverty reduction go hand in hand in development process.  Priorities must be set as guidelines for resource allocation, and policies and mechanism to meet such objectives.  Broad-based consultation ensures a concensus among sections of the population, making it possible to fully mobilise resources for growth and poverty reduction.

6. Lessons learned and challenges  Decentralisation and empowerment ensure flexibility and accountability among sectors and local governments in economic management and performance.  Challenges remain:  Quality and effectiveness of economic growth remain low.  Poverty reduction gains remain far from sustainable.  The poor have not proactively lifted themselves out of poverty.  Challenges arise from integration, esp. competition.  State resources remain limited.  Staff involved in poverty reduction remain insufficient, and lack training.